| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 640.41 | -57 |
| Intrinsic value (DCF) | 606.04 | -60 |
| Graham-Dodd Method | 14.35 | -99 |
| Graham Formula | 2.45 | -100 |
Smithson Investment Trust PLC (LSE: SSON.L) is a UK-based closed-ended equity fund managed by Fundsmith LLP, focusing on small to mid-sized companies with market capitalizations between £500 million and £15 billion. Launched in October 2018, the trust invests primarily in UK public equities, targeting long-term capital growth through a disciplined, high-conviction investment strategy. Operating in the competitive asset management sector, Smithson differentiates itself by leveraging Fundsmith's renowned investment philosophy, emphasizing high-quality, resilient businesses with strong cash flows and sustainable competitive advantages. The trust appeals to investors seeking exposure to smaller companies with growth potential while benefiting from Fundsmith's rigorous stock-picking approach. With a market cap of approximately £1.74 billion, Smithson is a notable player in the UK investment trust landscape, offering diversification within the financial services sector.
Smithson Investment Trust presents an attractive option for investors seeking exposure to small and mid-cap UK equities through a disciplined, high-conviction strategy. The trust's association with Fundsmith LLP, known for its successful investment approach, adds credibility. However, risks include its concentrated portfolio, which may lead to higher volatility (evidenced by a beta of 1.20), and its reliance on UK market performance. The absence of debt and a modest dividend yield (0.58p per share) provide some stability, but recent negative net income (-£8.11 million) and revenue (-£1.73 million) raise questions about short-term performance. Investors should weigh the trust's long-term growth potential against market cyclicality and sector-specific risks.
Smithson Investment Trust competes in a crowded market of UK-focused investment trusts, differentiating itself through Fundsmith's quality-focused strategy. Its competitive advantage lies in its strict investment criteria, targeting companies with high returns on capital, strong cash flows, and durable competitive advantages—similar to Fundsmith's flagship strategy but applied to smaller companies. This niche focus allows Smithson to capitalize on under-researched segments of the market. However, its performance is highly dependent on stock-picking accuracy, and its concentrated portfolio increases idiosyncratic risk. Compared to broader market trackers or diversified trusts, Smithson offers higher potential returns but with greater volatility. The trust's lack of leverage (zero debt) is a strength, but its relatively young track record (founded in 2018) may deter some conservative investors. Its ability to consistently identify high-quality small/mid-cap winners will be critical to maintaining its competitive edge.